ICICI Securities has upgraded the stock’s rating to ‘Add’ from ‘Hold’ and revised up the price target to INR 195 from INR 175 earlier Meanwhile, Kotak Institutional Equities has retained its ‘Add’ rating on the stock with an unchanged fair value of INR 195 During its investor day last week, Nykaa said it expects its beauty business to grow at a compounded annual growth rate of mid-to-late 20s% till FY28 Beauty and fashion ecommerce major Nykaa’s growth plans for its various verticals, disclosed during the company’s annual investor day last week, have received a thumbs up from various brokerages. ICICI Securities has upgraded the stock’s rating to ‘Add’ from ‘Hold’. The brokerage highlighted that Nykaa is now focusing on growth in the core beauty and personal care (BPC) segment and will reinvest savings from scale efficiencies to usher higher growth.
Hence, medium-term BPC contribution/EBITDA margins will likely stay flattish, it said. “Although short of Street’s expectations, the sharp profit improvement outlook in fashion/eB2B segments is a positive surprise. Also, the rapid scale up of its global store and some of its owned brands – ‘Dot & Key’ and ‘Nykd’ – were definite bright spots in Nykaa’s operating performance.
We reckon while material re-rating of Nykaa is contingent on the execution of its ambitions, clarity on growth/margin outlook should benefit the stock,” the brokerage added. It has also revised its price target (P.
